Food and beverage industry: who leads the rebound after the epidemic?

1) 20q1: the sectors of home hoarding consumption scene benefited, while the relevant sectors of catering industry suffered. In January 2020, the epidemic broke out, the country achieved strict control, and the consumption scene of home office benefited the sectors of quick freezing, condiments and snacks; They increased by 32.5%, 17.2% and 19.2% respectively in 20q1; At the same time, due to the short-term suspension of catering enterprises, the drinking scene around the Spring Festival disappeared, beer and other related sectors were damaged, and 20q1 fell 9.6%.

2) 20q2: the sector continued to recover, and the catering consumption demand began to make up. In April, the epidemic situation was effectively controlled, social activities began to recover, and catering consumption demand was replenished. For example, halogen products stores resumed operation, with an increase of 35.7% in 20q2; The beer sector achieved an increase of 46.2% with the arrival of the peak consumption season and the recovery of catering; The catering at the b-end of the condiment sector began to recover, and the C-end entered the inventory replenishment stage after inventory digestion, with an increase of 24.8% in the sector; Other sectors also have compensatory consumption, all of which have achieved a large increase.

3) 20q3: the demand for further repair, superimposed with the catalytic performance of the interim report, and the sector continued to rise. Although the epidemic of 20q3 broke out in scattered places, it had a relatively small impact on social activities. All sectors of popular products continued to rise, but the increase was less than that of 20q2 (except the quick-frozen sector). Among them, quick-frozen 20q3 increased by 46.6%, mainly due to the continuous recovery of catering scene and the acceleration of epidemic situation, which cultivated the consumption habit of quick-frozen food at the C-end.

4) 20q4: the valuation fell, and the required consumption performed well. After the epidemic became normalized, social activities returned to normal, the valuation of the sector increased, the dividend period subsided, and the popular goods sector began to callback. During this period, the mandatory consumer goods sector, such as condiments and dairy products, performed strongly, with an increase of 19.6% and 14.7% respectively in 20q4; Secondly, the upgrading of the product structure and the high-end process of the beer sector were further deepened, and the sector rose by 20.7%.

Foresee the future: in 2022, the mass products sector needs to observe the opportunities brought by the follow-up multi factor improvement. The number of provinces affected by this round of epidemic has increased, the scope has expanded, the number of people has increased, and the influence time is also slightly different; Therefore, after comparing with 20 years, we predict the trend of subsequent sub sectors. Specifically:

1) beer sector: compared with 20 years: ① epidemic impact: the epidemic is close to the peak beer season, showing a multi-point distribution trend, and the affected areas and number of people are increasing; ② Industry background: in the past 22 years, the upgrading of high-end beer industry has accelerated, but the cost side is significantly under pressure compared with that in the past 20 years, and the industrial price rise tide is coming.

At present, the two major observation points of the beer industry are [inflection point time of the epidemic in April] and [number of provinces continuously affected by the epidemic after April]. If the epidemic situation is well controlled in April and gradually relaxed nationwide, and the consumption peak season is normal in May, it is expected that the impact of the epidemic on the annual sales of beer enterprises is limited. It is suggested to pay attention to the opportunities for post epidemic sector repair.

2) condiment sector: compared with 20 years: ① cost: the cost in 22 years is higher than expected; ② Price increase: 21q4 industrial price increase, and price transmission has been completed in early 22; ③ Demand: the explosive demand of end C in 20 years can make up for part of the loss of end B; 22 years' C-end is not enough to make up for the loss of catering end; ④ Competition: in the past 22 years, the industry competition has intensified, the leading enterprises have expanded their production aggressively, the competition at the C-end has intensified, and the big b-end has risen.

The observation period from May to June is an important inflection point. 21q2-q3 is affected by the impact of community group purchase + high channel inventory + sluggish demand and other factors, and the base number of report end is low. In 2022, the cost continued to rise + the channel inventory level was high, the superimposed demand improved slowly, the cost of each enterprise may exceed the expectation, and there is still pressure in 22h1. Q3-q4 is the peak season for seasoning demand. If the epidemic is controlled from May to June, the sector is expected to improve significantly from 22q3.

3) dairy products sector: compared with 20 years: ① epidemic impact: the challenge of supply chain interruption in 22 years is great. Firstly, the logistics and transportation of raw materials and finished products are not smooth, and the terminal passenger flow is greatly reduced, which tests the flexibility of dairy enterprises Wuxi Online Offline Communication Information Technology Co.Ltd(300959) all channels; ② Industry background: the price of raw milk fluctuates at a high level, the demand for liquid milk is strong, and the high-end demand is resilient. We believe that in the liquid milk business, the impact of the epidemic on national dairy enterprises is relatively limited, and the impact on regional dairy enterprises depends on the main business area; In the milk powder cheese business, the industry concentration is expected to further improve.

4) leisure and snack sector: compared with 20 years: ① cost: the cost of 21 years is rising, and the enterprise cost of 22 years is facing higher cost pressure; ② Price: 21q4 industry generally raises prices, which has been conducted at present; ③ Demand and supply: in the past 22 years, dealers have been cautious in preparing goods, and the channel inventory is low; The sealing control has affected the channel demand of supermarkets.

At present, the inventory level of the leisure and snack sector is low, and the 21q2 industry is in a low base. If the subsequent epidemic situation can be alleviated, the demand is expected to make up. It is suggested to pay attention to the layout opportunities of high-quality leaders in the leisure and snack sector in the near future.

5) halogen products: compared with 20 years: ① outbreak time: this round of epidemic broke out after the Spring Festival, which is expected to have a great impact on the sales in the traditional peak season of 22q2; ② Outbreak area: the epidemic has a wider impact in 22 years, and the recovery time of offline business is expected to be prolonged; ③ Company strategy: the head company's expansion strategy has changed from radical to conservative, from high potential energy channels to street community stores, and from the first and second tier to sinking the market.

Therefore, it is suggested to pay attention to the inflection point of the epidemic and the development of the sinking market. At present, the bittern chain sector is at a historical low, the short-term epidemic disturbance does not change the leading Juewei Food Co.Ltd(603517) long-term growth logic, and pay attention to the layout opportunities.

6) quick freezing sector: compared with 20 years: ① epidemic impact: the central area of the epidemic was frustrated at end B and increased at end C, and the penetration rate of prefabricated vegetables increased significantly; ② Industry background: the cost of raw materials continued to be under pressure, and major enterprises completed price increases at the end of 21.

On the one hand, the follow-up opportunities come from the restoration of b-end catering channels brought about by the deregulation of the epidemic, on the other hand, prefabricated dishes benefit from the deepening of consumer education and the improvement of penetration during the epidemic it is suggested to pay attention to the sector repair opportunities brought by the subsequent performance elastic release under [B + C end demand trend establishment] and [cost inflection point establishment] of the sector.